Professor Russell Napier: The equity index fund is a dangerous product
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- čas přidán 23. 05. 2024
- The outbreak of Covid-19 sparked a transformation in monetary policy, according to Professor Russell Napier, with governments now effectively controlling money supply. Combine this with a decoupling between the West and China and Napier thinks investors must brace for a period of prolonged inflation.
In this interview, Napier tells the IC’s Mary McDougall what a new era of financial repression might mean for investors, why he thinks China is not investable and where he thinks the best value is in equity markets. He also explains why he thinks it's time to invest with active fund managers over index funds and what he thinks are the most common mistakes that private investors make.
Napier is a consultant, investor, historian, writer and Honorary Professor at both Heriot-Watt University and The University of Stirling. He’s advised institutions on asset allocation since the mid ‘90s and is chairman of Mid Wynd International Investment Trust. He's written two books: Anatomy of the Bear: Lessons from Wall St’s Four Great Bottoms and The Asian Financial Crisis 1995-98: Birth of the Age of Debt.
He also runs a course in finance called ‘The Practical History of Financial Markets’ and is keeper of The Library of Mistakes, a charitable venture he set up in Edinburgh in 2014.
Timestamps:
00:00 - Intro
01:10 - Takeaways from the launch of The Library of Mistakes
03:16 - Outlook for inflation and money supply
06:05 - Diminishing role of central banks
07:40 - What indicators investors should look at
08:48 - Outlook for equities
10:26 - Implications of financial repression
13:48 - Role of tax
15:27 - Impact of deglobalisation
18:20 - Is China investable?
21:10 - Companies that benefit from deglobalisation
23:40 - Index funds vs active managers
28:28 - Categorising by country vs sector
31:38 - Suggestions for novice investors
33:18 - Research of Hendrik Bessembinder
34:45 - Infrastructure and property
38:29 - Re-equitisation
41:42 - Problems with the search for yield
44:20 - Biggest personal mistake
46:00 - Most common mistakes made by private investors
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Charlie Munger, was an attorney by profession. However his chief client was ROCKEFELLER and teamed up with WARREN BUFFET who was a value/ business investor. BTW, Munger and Buffet are in their 90's and extremely benefitted from compounding, BRKH, never paid dividends ( all profits reinvested)
Excellent insights. Thanks Russell, even if I am a year behind in listening. So relevant to the average retail investor trying to see beyond the common misdirection of narrative spinners.
Fantastic interview - Prof. Napier is the Liam Neeson of financial commentators ? :)
Very interesting, enjoyed the interview a lot. Thank you ! Value content.
Great stuff.
(Please consider adding video too.)
Thanks for wonderful discussion
Excellent questions at the end!
Great interview - took a lot away from this. His short comments on property rights, China and resulting terminal values is so poignant
His advice regarding active v. passive, ie index funds is a triumph of hope over experience. He admits(quoting Buffet) that finding a good active manager is simple but not easy. But he implores us to find one! Even Buffet suggests the average investor is better in an index fund. Napier comes off as foolish in this interview.
On the topic, the whole conversation is so diversed that it looses the value...one has to hunt the uninspiring monologue, for finding utility of time spent as a learner. Could have used a presentation, i feel
stop naming names ~ its nepotism
I am a simple chap but I don’t think this man is thinking very clearly, he seems to suggest that there is a great advantage to some countries to come from China no longer being the provider of cheap overseas production to the west. Ok very simple logic there. But then he starts rambling on about different countries debts, you’re not investing in the country you investing in firms in the country remember? He is also a lawyer I believe? In my opinion the best background for this field is probably an economic historian. He also doesn’t like index funds but fails to properly explain why. Apart from that it’s really quite interesting.
Talked for an hour and said nothing.
Maybe you should do a podcast and enlighten us with your Genius
@@sheevamatimbas4300 he said nothing
About riding the bull, it's very helpful to invest into crypto. Crypto is stocks on steorid. You learn faster. I myself lived 5 cycle in 10 years and in the last cycle I have been able to almost sell the top. BUT, I understand the technology and see the difference between quality (1%) and trash (99%).
And in crypto, even today, there are good quality project with 20% yield a year! Normal people don't believe that, but they exist,.it's just very difficult to see what's scam and whats real.